10 Reasons Why Every College Student Should Invest in Stocks

By: Marvin Germo | June 27, 2014

One of my biggest passions is to invest in the next generation. I believe that in the next generation lies our future market movers and shakers that will take our country forward. Over the past few years, I’ve had the honor of speaking in different colleges and universities in and out of Metro Manila. Sowing the right seeds to propel students to invest at an early age.

One of my desires is to see the next generation flourish and take things to the next level. I want to see the Philippines prosper and I want to see them investing having there money work hard for them even while they are still in college. If I only knew stock investing when I was in college, I would have done so and bought ALI, DMC, URC, JGS, TEL, and so much more!

In this article, Danny Ke, a student I met in one of my talks in DLSU shares his “10 Reasons Why Every College Student Should Invest in Stocks.” Danny has been investing already for 16 months now and has seen his money grow by 22%! He has bought solid companies like Universal Robina Corporation, Jollibee, and Alliance Global. How big do you think his portfolio will be he reaches his 20s, 30s, or when he retires at say 40?

This article goes out to:

1. Every employee and business person out there! If a college student can do it so can you!

2. Every college student! Hope this inspires you to invest and make your money work hard for you!

(Picture with Danny Ke and Lynford Ma after a speaking engagement with DLSU)

Investing in the stock market would never have been possible for me until I met Mr. Marvin Germo. I had common misconceptions of thinking that stock market is actually a place for the gamblers to play with their excess money. I also thought that I need to be a multimillionaire for me to participate in.

First of all I would like to thank Mr. Marvin Germo for giving us talks in DLSU. He debunked our common misconceptions in stock market. I am now seeing more and more college peers investing in the stock market with decent returns. Together, let us all achieve financial freedom!

The 10 reasons why I invested in stocks while I am in College

1. I am young! I can hold longer than anyone else.

The younger you are, the longer you can hold. This is the common belief and it’s true! When you are younger, you are farther from your retirement, which gives you more years to hold therefore more returns!

2. I don’t need my money.

I don’t have to pay any utility bills, tuition, loans, and debt. My savings will be idle for years to come. I might as well invest it than let it sleep.

3. Bank’s interest cannot cover the inflation.

Bank Current Account/Savings Account (CASA) only pays 0.25% per annum, time deposit on the other hand only pays roughly around 1% annually as of this writing. However inflation rate is around 4-5% per year. Being conservative make you feel safer and you earn certain rate, but you are actually losing around 3.5% a year from the interest rate spread.

4. It encourages me to save.

Watching my money grow is incredibly amazing. I never thought that I can actually earn money while I am in college. It’s like planting seeds, then watching your plants grow and give off fruits. The more I plant the seeds, the more my money is growing exponentially and thus it encourages me to save more.

5. I am debt free.

Students are normally debt free unlike working adults. We don’t have to worry about future significant cash outflows, having said that, we can invest our excess money and just forget about it.

6. It’s like doing business while studying

Investing, particularly in stocks gives you a piece of ownership of the big companies. Don’t you like the concept of company’s executives managing your business and you pay them salaries? If you hold a share of stock, you can actually tell your friends that you own the company named Ayala (for example). hehe!

7. I am busy in academics and I have classes.

Academics pushed me to go for long term because I have classes in school. I cannot check the market every second and I don’t have to, since I am a long term investor. For this reason, I am immune to volatility and negative emotions.

8. I have more risk appetite and risk tolerance

The stock market is actually riskier than any investment we have in the Philippines, However

We don’t have to be so conservative. We can try stocks as the stock market has proven to beat all other investments and also beat inflation. When things turn bad, we can always look back as our parents will still continue to give us allowance, we wouldn’t have to worry yet about our future.

9. I can add funds regularly

Having allowance each day is one of the best things in life as a youth. However, what matters is not how much your parents give you, but rather how much you spend for your daily needs and how much you save. The more you save, the more excess cash you’ll have. You can make your excess cash work for you by investing

Reading news can help us make rational and wiser decisions for investing. It also makes us aware of what’s happening around the world in general, and around the Philippines in particular. Some examples would be, macroeconomic factors like Federal Reserve tapering quantitative easing for last year, and BSP hiking interest rates for special deposit accounts for this year.